Release of annual adjustments for reserve calculations and deposit reporting.The Federal Reserve Board on October October: see month. 1, 2003, announced the annual adjustments in the amount of net transaction accounts used in the calculation of reserve requirements Reserve Requirements Requirements regarding the amount of funds that banks must hold in reserve against deposits made by their customers. This money must be in the bank's vaults or at the closest Federal Reserve Bank. and the cutoff level used to determine the detail and frequency of deposit reporting. All depository institutions Depository institution A financial institution that obtains its funds mainly through deposits from the public. This includes commercial banks, savings and loan associations, savings banks and credit unions. must retain a percentage of certain types of deposits in the form of vault cash Vault cash Cash kept on hand in a depository institution's vault to meet day-to-day business needs, such as cashing checks for customers; can be counted as a portion of the institution's required reserves. , or as a deposit in a Federal Reserve Bank, or in a pass-through account at a correspondent institution. Reserve requirements currently are assessed on the depository The place where a deposit is placed and kept, e.g., a bank, savings and loan institution, credit union, or trust company. A place where something is deposited or stored as for safekeeping or convenience, e.g., a safety deposit box. institution's net transaction accounts (mostly checking accounts). For net transaction accounts in 2004, the first $6.6 million, up from $6.0 million in 2003, will be exempt from reserve requirements. A 3 percent reserve ratio will be assessed on net transaction accounts of more than $6.6 million up to and including $45.4 million, up from $42.1 million in 2003. A 10 percent reserve ratio will be applied above $45.4 million. These annual adjustments, known as the low reserve tranche Tranche One of several related securities offered at the same time. Tranches from the same offering usually have different risk, reward, and/or maturity characteristics. tranche A class of bonds. adjustment and the reservable liabilities exemption adjustment, are based on growth in net transaction accounts and total reservable liabilities, respectively, at all depository institutions between June 30, 2002, and June 30, 2003. For depository institutions that report weekly, the low reserve tranche adjustment and the reservable liabilities exemption adjustment will apply to the reserve computation Computation is a general term for any type of information processing that can be represented mathematically. This includes phenomena ranging from simple calculations to human thinking. period that begins Tuesday, November 25, 2003, and the corresponding reserve maintenance period that begins Thursday, December 25, 2003. For institutions that report quarterly, the low reserve tranche adjustment and the reservable liabilities exemption adjustment will apply to the reserve computation period that begins Tuesday, December 16, 2003, and the corresponding seven-day reserve maintenance period that begins Thursday, January 15, 2004. Additionally, the Board increased the deposit cutoff level that is used with the exemption level to determine the frequency and detail of deposit reporting. |
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